SEC Plans More Frequent Inspections
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Monday, January 27, 2003

SEC Plans More Frequent Inspections

Not only do fund firms have to worry about new rules, such as the proxy disclosure rules approved last week by the Securities and Exchange Commission, it is also likely to find SEC investigators ringing its doorbells more frequently.

The SEC is earmarking at least part of its increased budget to bulk up its Division of Investment Management. The SEC's plans to hire "hundreds" of examiners for the division were revealed by Edward Ryan, assistant district administrator of the SEC's Boston District Office, in a speech to the NICSA East Coast Regional Meeting in Boston earlier this month.

Ryan added that the SEC plans to hire its largest wave of new recruits, according to a published report. The Bush Administration is seeking to raise the SEC's budget as part of its response to the widespread scandals in corporate America revealed by the ongoing bear market.

If Congress approves the budget increase, the new examiners will be used to increase the frequency with which the SEC inspects the largest twenty fund complexes to once every two years. Currently, the SEC seeks to inspect complexes once every five years.

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